Is there a place you can search to find lawsuits by plan participants against a fiduciary or plan sponsor that have been settled?

In particular, a participant who claims his distribution was delayed causing him a loss due to market fluctuation?

Corporation A has a SIMPLE, to which contributions have been made in 2004.

Corporation B has no plan at all.

Corporation C purchases both A & B, in mid-2004. C has no plan at all.

I don't have much in the way of specific information yet, so I'm considering generalities at this point.

Corporation C may want to establish a 401(k) plan for 2004. I do not yet know if they want to include A & B for 2004, or not. This leads to several questions. Assuming they DO want to include A & B, it would seem reasonable for A to "terminate" the SIMPLE plan. But, if the corporation A still exists, even though under new ownsership, can this be done? I'm inclined to think it can't. If you think it can, then I assume you'd have to consider it for 415 limits, etc?

If C does NOT want to include A & B, then I think they can simply establish a plan, and exclude the employees of A & B under the 410(b)(6)© exclusion. They can amend this away for 2005 if they want to, since the SIMPLE can be terminated for 2005. This seems like the cleanest way to handle the whole situation, although it may not be precisely what the client wants to do - don't know yet.

I also don't have census figures yet - so I'm not sure if it would be possible to include B while excluding A for 2004, if that is desired.

Any thoughts would be appreciated. I have a feeling that I'm looking at this cross-eyed somehow. Thanks!

Does how an LLC is taxed affect whether or not a LLC member may participate in a cafeteria plan? If a member is a less than 2% owner and the LLC is taxed as an S-Corp, may the member particpate in the LLC's cafeteria plan? If the LLC is taxed as a partnership, is there any minimum level of ownership that a member may hold and still participate in the cafeteria plan? Cite references would be appreciated.

Private non-profit foundation in the senior housing business employs 9 individuals as property managers, 4 of whom are at or near retirement age. No formal retirement plan is in place, but active employees and one partially retired individual receive group health or Medigap coverage, no-cost housing and car (both needed for job), in addition to salaries.

Employer now wants to establish formal retirement arrangement. Presuming a Section 403(b) plan is established, or nonqualified annuities purchased, can employer continue to provide no-cost housing and/or car to retirees who no longer perform services for the Foundation?

Can you explain the requirement for Top Heavy determination?

Since a participant was not determinied to be a key employee in 2003, That means he is eligible to to participate in 2004, then 2004 gross compensation and officer status will determine the "key" status for 2005? and so forth?

a client just called and said they have an employee (terminee) fully vested that was illegal to work. they used an incorrect social security number. now they want to know what to do with his retirment plan account. some his employer money. they actually dont want to give the money to him. of course they have to give the deferrals. do you let him roll it over or do you withhold and send to the irs. how do you report this if you dont have the correct ss number?

Scenario: Participant terminated employment March 2004 and stop making loan payments. Participant was rehired in May 2004 and did not have payroll deductions for loan start again.

The loan policy states that the loan will be offset at termination within a reasonable period of time after termination. Reasonable period of time is interpreted as being "90 days from date of termination" at which point the TPA firms processes the offset and sends a 1099-R to the participant.

It is now the end of July and payments still have not resumed. The end of the cure period was 6/30/04, so the participant must be taxed.

Questions:

Should this loan be considered a deemed distribution, or a loan offset? I was always of the opinion that there had to be a current distributable event for the loan to be offset. This participant is an active employee now.

OR, can you offset the loan and say the participant had a loan offset during the "termination period", but that the 1099-R was just issued?

Any comments are appreciated.

I understand that after five years I may take out of my Roth IRA up to $10k, tax free and penalty free to purchase my first home, what if the home I am buying is in another country? I am a U.S. citizen, she is from Dublin and has kept her Irish citizenship and we would like to settle there. Is a Roth IRA a good way to get us there?

We have a situation where we have not taking the amounts deferred into account for purposes of FICA reporting. All employee contributions are 100% vesting and therefore should have been taken into account when. How do we go about correcting this? The regulations simply state the non-duplication rule does not apply and that the entire amount will be taken into account for FICA purposes when it is distributed. Also, it states that penalties and interest may apply. I read this to mean that we do nothing now with respect to the prior years and when it is actually paid out, include it for FICA purposes. Going forward, we will operate per the regulations.

Any thoughts? Suggestions?

Thanks!

The (small company) 401k plan ceased contributions, distributions, etc. on 12/31/2003 so the company could start with Simple IRA in 2004. I was preparing to term the 401k, but in talking with plan sponsor we realized he really just wanted/needed a safe harbor provision. If the Simple IRA is confined to 2004 only, is there any reason why the 401k can't be brought back into operation for 2005? Any amendments needed? There are no plan loans or other complications, and there have been no distribution requests. We could come back and get the Simple IRA money after the 2 year wait.

How do we look?

I neglected to report on 5500 that the EIN and plan Sponsor had changed from previous year. Could someone give me advice on how to go about making this correction? I called the IRS and the current year filing has not been recorded as of yet. They said to give it a couple of months and check back. Just wondering what some of you would do.

Thanks

One of our employees submitted the EOB from the insurance for services rendered without an actually receipt.

Is this acceptable documentation to process the claim?

Major HMOs such as Kaiser Permanente conduct brand campaigns to influence the decisions of Benefits Managers. What is the best way for small online activist efforts, such as http://www.kaiserpapers.org to get a consumer (not to mention victim) point of view over to Benefits Managers? They do not have the funding to launch a PR campaign.

In the process of researching TAP529 accounts for college I came across an interesting opinion I read in the website Savingforcollege.com. The author encouraged diversification, but if one needed to choose between the 529 or a Roth IRA, the IRA might be a good way to go. To summarize, reasons would be: you can withdraw Roth contributions tax-free and without penalty; flexibility of using the IRA for college and/or retirement (529 is college only); the investor can choose the type of investment.

I have two children (ages 10 and 8) and not a lot to invest. I know I won't be able to cover all their expenses and that loans will be used, but I'd like to get something going. There are so many types of investments from which to choose, I find it paralyzing and I end up doing nothing. (My spouse and I each have 401ks through employment.)

Would anyone have any thoughts to share on this option? Also, I've reviewed so much literature I'm not sure if I read this, but can you only invest in Roth IRAs if you are earning income? What if one of use becomes unemployed?

Thank you, in advance, for any help you can provide.

In Rev. Proc. 2004-4, the Service announced that it would not issue determination letters approving tribal plans as governmental plans under Code section 414(d). The Service may be holding back on such rulings because of pending legislation that would amend the Code and ERISA to state affirmatively that tribal plans are treated as governmental plans.

What are people doing in the meantime--adopting and operating 401(a) plans to comply with the rules for non-governmental plans? Requesting DLs as non-governmental plans? Holding off on applying? Applying as governmental plans as letting the applications sit with the Service, as with cash balance plans?

My client had a new recordkeeper for its 401(k) plan, and many errors have been discovered. They never got a DL, so can't use EPCRS. We'd like to get a DL, but are somewhat baffled about the best approach.

We also have some nonqualified plans which would not be top-hat plans under ERISA, but that is probably a separate post.

Any thoughts or advice?

Any reason why an employer, who hires one part time EE to perform bookeeping with annual hours less than 1000, can't have a profit sharing plan and only cover himself?

It seems this topic is being forced upon me more often and so I have been trying to research as best I can. But with anything that is not within my comfort zone, even if I think I have it figured out it makes me feel better to get independent confirmation.

The facts are that we have an S corp with Owner #1 (100% owner) is 70 and taking a salary of $150,000 and the amount seems to be flexible. Owner #2 is the spouse age 76 and he is collecting a nominal salary of $15,000 a year. This is also flexible, but historically has been low or none at all. There are 2 employees that make between 40k-60k that are in their late 40s to early 50s.

Of course the client wants to sock away as much as possible for themselves and as little as possible for the two employees. For the sake of argument let's assume both owners will work at least another 5 years.

In Sal Tripodi's ERISA outline book he gives an example of a DB/DC combo design in which the DB plan does not cover any NHCs. Since the plan's can not pass discrimination tests on their own, the plans are permissively aggregated for testing purposes. 401(a)(26) is passed because 50% of the employees are covered in the DB plan.

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Ok I think I am ok with everything up to this point, but I am getting a little hazy on the testing of the benefits to be certain that the benefits provided are not discriminatory.

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Tres.Reg 1.401(a)(4)-9(b)(2)(v)(D) deals with the special gateway test for DB/DC plans. The example in the ERISA Outline book explains how to look at the testing but assumes that all employees are covered in both plans. It basically takes the normal allocation rate for the HCE in the DC plan, adds it to the equivalent allocation rate in the DB plan and then compares it to the NHC average to be certain we are passing 401(a)(4) rate group testing applying the gateway rules (NHC allocation rate must be 1/3 the HCE allocation rate if the HCE allocation rate is less than 15% or the NHC rate must be 5% if the HCE allocation rate is between 15% and 25% and provides for 1% increases if the HCE allocation is higher). There is also mention that 7.5% to the NHC is a safe harbor amount even if the HCE allocation is over 40%.

In my specific case, the DB plan is a 75% formula reduced by 1/25 for each year of participation less than 25 years. The DC plan is run at 7.5% of pay.

When I run the discrimination testing in Datair, there are 2 tests that give me values for the 401(a)(4) test. The first is called the annual test. The most valuable rate for owner #1 and owner #2 is 3.0 (1/25*.75). The value for NHC#1 is 4.30 and for NHC#2 is 3.28.

The other test which I get values for is called Equivalent Allocation. The values for Owner#1 is 21.47, Owner#2 is 23.91, NHC#1 is 7.50, and NHC#2 is 7.50.

Based on my superior sleuth like abilities (ha) I feel comfortable saying that the values for the NHC on the first test is the same as testing the contribution based on benefits. The 4.30 and the 3.28 are EBARs. On the second test, the 7.5% is obviously just the 7.5% allocation rate that they received.

The testing shows that the first test (annual) passes because both NHC rates are higher than both HCE rates. THe second test fails because of course the values are reversed.

So the big question is, can I rely on the annual test to pass the 401(a)(4) testing? Or do I need to increase the NHC allocation in the DC plan to 23.91% so that the equivalent allocation test is passed?

My gut is telling me that we are passing the test because the annual test is passing, and perhaps I can lower the DC allocation lower than 7.5%. Although I am not overly concerned with saving a few hundred dollars in employee costs.

Thanks for reading my novel here and thanks even more if you have input.

When an EIN no. changes for a plan how should this be reflected on the 5500. Or is it?

Anyone know the correction method. there does not seem to be one listed but it would seem to me that you would have to redo all the tests using the appropriate definitions and if the plan fails you would correct using the method for failures to pass adp/acp

is it possible to exclude comp personal and vacation time from the definition of compensation? the plan document makes no specific reference to these types of comp.